04-07-2014 Trading Journal

The market continued on downward from the starting gate, with the exception of a small bounce inside the hour after the open, price followed the waterfall pattern all the way to the close.

$SPY is now trading near the heavy supports (79 & 89 MA lines, lower range of consolidation area–> near the previous two pivot lows in 3/14 and 3/27 respectively).

Due to that bounce that failed near the close, I decided to close my $TZA and $FAZ to lock in the gain.

Why?

At first, I thought I would hold for tomorrow; but then I noticed the falling prices for many of the momo stocks had been “decelerated”. In other words, while they were still down for the day, the percentage down was less than that of last week. Also, $TZA and $FAZ are not known to be trending vehicle. From my history of trading, I gave back gain in $TZA for holding too long more than I could count. They had a tendency to gap down against me if I over-stayed the position. Thus, taking this lesson, I decided to take the money and run to break the old pattern.

If market continues to fall tomorrow, I can always buy $TZA back…

How did I start my day?

Let’s see, I added to $FAZ after the open to flow with the upward momentum. I did not want to add to $TZA since I already had a large position. Adding more would be over-weighting my port that a sudden rally on the DOW would put my port in a precarious position.

Next, I bought $NUGT since the chart looked good for a bounce.

Price was trading above the 5 MA line and it gave me the confidence to buy a starter position. If it drops below the 5 MA line tomorrow, I’ll be out. If it bounces higher, I’ll add more.

As mentioned above, by day end, I closed both $TZA and $FAZ to lock in gain.

Because both $LRAD and $SVBL did not drop much, the gains on both $TZA and $FAZ more than offset the losses that I ended up with a small gain in my port.

Current holdings:

LRAD, SVBL, NUGT and 66% cash.

From my other account:

$MCIG was struggling with the support @ $0.60 so I put a stop just below 0.60 and was stopped out in no time. Price proceeded to waterfall all the way to $0.50 and consolidated there for about half-an-hour. Seeing that price did not go any further down (come on now, at $0.50, $MCIG was down 20%, so I saw little risk for price to go any further down); thus I started buying some of my shares back. I paid b/w $0.50 and $0.535 to buy back about 70% of my shares. I used the 30% to add more $FITX when it was trading at low $0.73.

As you can see on the $MCIG chart above, price showed a very nice hammer candlestick pattern. Did you see the tail coming close to the 89 MA line. If price takes out the high of today hammer candlestick, $MCIG may bounce from here.

$FITX also recovered nicely from the day sell-off.

Did you see how the Bollinger band began to form a narrow range around the consolidation area? Any significant price movement that closes either above or below the Bollinger band will be big alert to future price trend. I like to think that price will close above the Bollinger band simply because I believe $FITX will complete the facility with such high standard that Health Canada will simply approve the license.